Results
Q1 of 2014/15
1 April 2014 to 30 June 201412 August 2014

Agenda1. LEM at a Glance
2. Highlights and Business Review
3. Financial Review
4. Strategy and Outlook2

1. Global Market Leader in Current and Voltage Transducers
Market Position

Performance

Perspectives

 Continued sales
growth and margin
improvements
 Dividend yield >5% ineach year since 2009

 Reinforced investment in innovation
 Solid growth perspectives due to underlying trends
 Strong foothold inChina
 EBIT margin target of
15 to 20%

Source: Yahoo Finance Global market shareof 50% in Industry
 Benchmark in service
and product quality
 4 production sites inEurope and Asia
 Sales of CHF 245.6
million in 2013/14

3

1. LEM Applications: Hybrid Loader
A HTFS 800-P

6

1

2

34
4

1 Diesel engine
2 Generator
3 Inverter
4 Electrical motor
5 Transmission
6 Battery

AA hybrid loader boosts fuel economy by up to25%, increases the system performance and ishalf as loud as a conventional loader.
The special internal combustion engine (1)drives an AC generator (2) for the bucketmoves. The generator converts the engine'smechanical energy into electrical energy, whichis converted by the inverter (3) to supply theelectrical motor (4) to drive the transmission andthe wheels.
The currents are measured with current
transducers (A) to control the inverter. The
accuracy of the current measurements allows tomaximize the motor torque and overall motor
efficiency. The transducers also enable thecontrol system to sense over-current situations
signaling a potential defect.
41. LEM Applications:
Formula 1 Energy Recovery System

4A

HC5 FW
561

1 Pedals (accelerator, break)
2 Turbocharger
3 MGU-K
4 MGU-H
5 Battery
6 ERS break pressure valve
7 Engine control unit

37 A22014 Formula 1 cars include a revised energy
recovery system (ERS). Engine specifications
impose a 440 kW turbocharged (2) engine
combined with an ERS (3, 4) providing
additional 120 kW for over 30 seconds per lap.
The ERS uses two distinct energy sources toprovide the extra power: kinetic energy frombraking and thermal energy from the exhaustgases. The energy is converted into electricity.
The electricity is fed into a battery (5) andcontrolled by the ERS control unit (7).
LEM's HC5 FW (A) family of automotive current
transducers measure the electric currents
generated by each source, and allow thecontrol unit to make the best decision of how
and where to direct the available power.
5

1. LEM Applications: Roller Coaster
Roller coasters use less and less traditional
chain lift. The ride is maintained by gravity.

1
2The initial acceleration energy is provided via
one or several linear motors (4), catapults, orother mechanisms replacing hydraulic orpneumatic power. In case of linear motors thepropulsion of the carts (1) along the track atvarious stages is managed using electromagnetic fields that require high currents.

435A

1 Train / cart
2 Drive tire

A LF 1005-S

3 Inverter for drive tire
4 Linear motor
5 Inverter for linear motor and control unit

These electrical linear motors enable the various
torques and accelerations in time and duration.
The motors are controlled by electrical drives via
the currents supplied. The current transducers(A) give the feedback to the control loop (5) inorder to ensure the right accelerations independently of the load and friction of the train.
61. LEM Applications:
Sewing Machine/Embroidery Machine47

Accuracy and speed of the table movements, aswell as the correct, accurate and regulated
rotation speed of the main axis for the needles
are directly linked to the currents provided to themotor (5) through a servo drive (1). The working
table (7) is moving in horizontal X and Y
directions thanks to linear motors (6) controlled
by two position servo drives (1).

352

6

61

A

1 Servo drives
2 Control unit
3 Head4 Main axis
5 Motor6 Linear motors
7 Working table

Full servo control allows for speed and precision
in industrial sewing/embroidery machines.

A HLSR 10-P

Current transducers (A) are used in each servo
drive to measure two of its three phase output
AC currents. Their accuracy, high performance,high temperature working environment, lowtemperature drift contribute to a very stable,
quick, reactive, reliable and precise system.
71. Diverse Target Markets – Diversified Businesses
Businesses

Share of sales
Q1 of 2014/15

Green Cars
Conventional Cars

13%High precision
Traction
Renewable energies& power supplies

Cyclicality

Macro drivers

Consumer durables

Technology adoption
Fuel savings

Late cycle

Infrastructure investments

Mid cycle

Energy prices, subsidies

Early cycle

Industrial investment

87%

Drives & welding

Automotive segment
Industry segment

8

Agenda1. LEM at a Glance
2. Highlights and Business Review
3. Financial Review
4. Strategy and Outlook9

2. Highlights Q1 of 2014/15: Solid Sales Growth
In CHF millions, %Q1 2014/15

Q1 2014/15 vs.
Q1 2013/14

Q1 2014/15 vs.
Q4 2013/14

Orders

64.7

-0.5%

+2.0%

Sales

65.0+5.2%+6.4%

EBIT13.5+2.2%-0.4%

Net profit

10.7+9.7%-14.2%■

Strong EBIT margin, above target range of 15-20%■

Strong competition and price pressure across all markets■

Growth in China continuing■

Asia the most important sales region for LEM, for the first time10

2. Net Sales
In CHF millions
In CHF millions, %
300

Sales

Q1 vs. Q1
asreported275

Q1 vs.
Q4
at constantcurrencies

250

Industry

56.5+5.6%

+9.9%

+7.1%

225

Automotive

8.6+2.9%

+9.1%

+1.7%

200

Total sales

65.0+5.2%

+9.8%

+6.4%

175

■150■125100■

Sustained growth from Industry businesses
Growth in Automotive businesses, but
below expectation in green cars markets
Negative currency impact on sales

75
50250
10/11

11/12

12/13

13/14

Q1 14/15
112. Quarterly View
In CHF millions

Book-to-bill ratio

70.0
63.1

65.1
61.8

61.1

60.0

55.0

65.0
57.6

1.2

61.1
1.0

55.8

50.0

 Stable book-to-bill ratio Lead times requested
by customers remain
short

0.8
40.0
0.6
30.0
0.4
20.0
0.2

10.0

0.0

0.0
Q1
12/13

Q2
12/13*

Q312/13

Q4
12/13*Orders received* Restatement following IAS 19R application (pensions)

Q1
13/14

Q2
13/14

Sales

Q3
13/14

Q4
13/14

Q1
14/15

Book-to-Bill ratio12

2. Industry Segment: Regional Markets
EuropeIn CHF millions, %Sales

GrowthQ1 vs. Q1

GrowthQ1 vs. Q4

Europe23.6+1.3%-6.5%

N. America

5.7-23.1%-17.4%

Asia andRoW

27.2+19.4%+32.2%

Total

56.5+5.6%+7.1%

North America
Asia and ROW
42%

48%

10%

 Solid growth across most businesses Strong boost from China, export-led
growth in Japan, seasonality inrenewable energies Success with recently launchedproducts Asia the most important sales region13

2. Industry Segment: Business Development
In CHF millions

Op. EBIT in % of sales
30280
25240

200

20160

15120
1080
540

00
10/11

11/12

12/13*

13/14* Restatement following IAS 19R application (pensions)Q1 14/15

Businesses and Applications
Drives & welding (growth QoQ: +4%)
 Strong sales in Asia
 Slow business in Europe and North America
 Stable market share
Renewable energies & power supplies (+14%)
 Seasonality in renewable energies
 Growing investments in renewable energies inChina and Japan
 YoY growth -5% due to currency impact
Traction (+8%)
 Increased activity globally, particularly in light railapplications
 Sales growth due to projects in China and Korea
High-precision (-1%)
 Lower demand in medical and test &measurement markets

142. Automotive Segment: Regional Markets
In CHF millions, %Europe

Sales

GrowthQ1 vs. Q1

GrowthQ1 vs. Q4

Europe0.5-0.3%-20.1%

N. America

4.3

-6.4%

+2.4%

Asia andRoW

3.7+17.1%

+5.0%

Total

8.6+2.9%+1.7%North America
Asia and Rest of World
9%38%

Focus on Asian and North Americanmarkets
 Conventional cars business driving
performance Green cars market development
below expectations
 Negative currency impact in USD and15JPY53%

2. Automotive Segment: Business Development
In CHF millions

Op. EBIT in % of sales
2040

1835

1630
1425

121020Businesses and Applications
Conventional cars (growth QoQ: +3%)
 Stable demand for battery management
applications
 Some growth in USA and China
Green cars (HEV, EV) (-3%)
 Weak global markets
 Low sales and postponed projects

81561045200
10/11

11/12

12/13** Restatement following IAS 19R application (pensions)

13/14

Q1 14/15

16

2. Business Development ChinaProductionSales■■

Market share of over 50%
Most important market with 28% oftotal sales

LEM China expands its #1 position aslargest manufacturing site of the Group(58% of total production, compared to56% in financial year 2013/14)“Made by LEM” quality■■
In CHF millions

In CHF millions

60140
120

50

100
4080
3060
2040

1020

0
10/11

11/12

12/13

13/14

Q1 14/15

010/11

11/12

12/1313/14Q1 14/15

17

Agenda1. LEM at a Glance
2. Highlights and Business Review
3. Financial Review
4. Strategy and Outlook18

3. Income Statement
In CHF millions

Q1
2014/15

Q4
2013/14

65.0

61.1

+6.4%

61.8

+5.2%

Gross margin

45.3%

48.4%

-3.2pt45.4%-0.1ptOperating expense

-15.9

-16.0

-0.8%

-14.8

+7.3%

EBIT

13.5

13.6

-0.4%

13.3

+2.2%

Net financial exp.

0.1

0.3

-49.9%-1.4

N/A

Income tax-3.0-1.4

N/A

-2.1

+39.0%Net profit

10.7

12.5

-14.2%

9.8+9.7%

Sales

Q1 vs. Q4Q1
2013/14

Q1 vs. Q119

3. Results by Quarter
In CHF millions

In % of sales
30%7063.1

65.1

61.8

61.1

60

55.0

65.0

61.1
57.6

55.8

25%

5020%
4015%

 Fifth consecutive
quarter with EBIT
margin above targetrange
 Q4 of 2012/13 included
a restructuring charge ofCHF 1.9 million

3010%
205%

1000%
Q1
12/13

Q2
12/13*

Q3
12/13

Orders received

Q4
12/13*

Sales* Restatement following IAS 19R application (pensions)

Q1
13/14

Q2
13/14

Op. ROSQ3
13/14Q413/14

Q1
14/15

Net Profit in % of sales

203. Gross Margin
In CHF millions

In % of sales
48%

13547%

12046%

10545%

Gross margin

Q1
2013/14Q4
2013/14Q1
2014/15

28.1

29.6

29.4

45.4%

48.4%

45.3%

in CHF millions

Gross margin
in % of sales

9044%

7543%

60

42%

4541%

3040%

1539%

 Q1 2014/15 gross margin in line with lastyears' margin, in accordance with seasonal
sales mix Q4 2013/14 impacted by positive one-offpension adjustments

38%

0
10/11

11/12

12/13*

13/14* Restatement following IAS 19R application (pensions)Q1 14/15213. Operating Expense
In CHF millions

In % of sales
30%

7060

25%

Operatingexpense

Q1
2013/14Q4
2013/14Q1
2014/15

14.8

16.0

15.9

23.9%

26.2%

24.4%

in CHF millions
5020%

Operatingexpensein % of sales

4015%
3010%
20

 Ongoing strict cost control measures
 Operating expense as a percentage ofsales remain on low levels

5%

100%

0
10/11

11/12

12/13*

13/14* Restatement following IAS 19R application (pensions)Q1 14/15

223. R&D Expense
In CHF millions

In % of sales

168%

14R&D expensein CHF millions

12Q1
2013/14Q4
2013/14Q1
2014/15

3.9

3.5

3.9

6.3%

5.7%

6.0%

6%

R&D expense
10in % of sales

4%

862%

4

20%

0
10/11

11/12

12/13*

13/14* Restatement following IAS 19R application (pensions)Q1 14/15

 Maintained high investment in R&D for
both segments
 Ongoing renewal of product range withfocus on optimized cost, higher
accuracy and new functions
 Above the long term average of 5.5% ofsales
233. EBIT
In CHF millions

In % of sales

6026%
24%

5022%

EBIT
in CHF millions

Q12013/14

Q42013/14

Q1
2014/15

13.3

13.6

13.5

21.5%

22.2%

20.8%

20%

40

EBIT
18%

3016%
14%

2012%

in % of sales

 Continued cost control and high grossmargins
 Profitability above target range of 15 to20%

10%

108%
06%
10/11

11/12

12/13*

13/14* Restatement following IAS 19R application (pensions)Q1 14/15

243. Financial Expense
In CHF millions*

Q1 2013/14

Q4 2013/14

Q1 2014/15

Exchange effect*-1.4+0.2+0.1

Other financial expense & income+0.0+0.1+0.0

Total-1.4+0.3+0.1

Foreign exchange hedging policy continued
EUR: 100% of net exposure 12 months forward

USD: 100% of net exposure 18 months forward

The line “exchange effect” in the financial result is mainly due to currency volatility during the time between booking andsettling a receivable/payable. Over and above this line, foreign exchange rates impact every P&L line through the rate at
which each transaction is booked and at which it is consolidated into CHF.

25

3. Net Profit
In CHF millions

In % of sales

Q1
2013/14Q4
2013/14Q1
2014/15

9.8

12.5

10.7

15.8%

20.4%

16.5%

Net profit
5020%

4518%

4016%

in CHF millions

Net profit
in % of sales

-1.4
3514%

3012%

2510%

208%

156%

104%

52%
0%

0
10/11

11/12

12/13*

13/14* Restatement following IAS 19R application (pensions)Q1 14/15

Q1 2013/14
-2.1

13.3

EBIT

9.8

Financial expense

Income tax

+0.1

-3.0

13.5

EBIT

Net profit

Q1 2014/15

10.7

Financial expense

Income tax

Net profit
26

Agenda1. LEM at a Glance
2. Highlights and Business Review
3. Financial Review
4. Strategy and Outlook27

4. Market Factors and Strategy■ We firmly believe in our strategic
direction and the 4 drivers for ourbusiness remain unchanged■ We will continue to capitalize on
the drivers of LEM’s markets
through pure play components company
 diversification across geographiesand businesses28

4. Outlook■

Economic perspectives improving with modest pick-up in Europe
and North America and robust performance in China■For 2014/15 we expect■ Industry segment: well positioned to capitalize on economic
improvements and support from new products■ Automotive segment: resume growth backed by growing
global vehicle production and market share gains in thegreen cars business■ Competition to remain fierce due to overcapacities in ourindustry as well as in those of our customers■

Further implementation of our strategic initiatives
29

Financial Calendar and Contact Details
Financial calendar
13 November 201417 February 2015
4 June 2015
25 June 2015
30 June 2015
2 July 2015

Half-year 2014/15 results
Third quarter 2014/15 results
Year-end 2014/15 results
Ordinary Shareholders’ Meeting for the year 2014/15
Dividend ex-date
Dividend payment date

For further information
Julius Renk, CFO
Phone: +41 22 706 12 50
Email: investor@lem.com
30